Proceeds from the issuance will be primarily used to repay $300 million
of DTE's 7.625% senior notes maturing on May 15, 2014 and the remainder
for general corporate purposes. The Rating Outlook for DTE is Stable.

--Over 90% of consolidated earnings are derived from regulated
activities;

--Large but manageable capex program including environmental upgrades at
coal plants;

--Sufficient liquidity;

--Improving service area economy.

DTE's current ratings reflect the low risk of its utility businesses, a
constructive state regulatory environment in Michigan, and the strong
operating profile of its generating assets. The company also benefits
from a sufficient liquidity position, manageable debt maturities, and an
improving economy in Michigan, albeit from a depressed base. Credit
concerns considered in the rating include a still weak service-area
economy with above-average unemployment in the Detroit area, high level
of parent only debt (approximately $1.8 billion), and the future effects
of more stringent environmental regulations on DECo's predominantly
coal-fired power generation portfolio. The ability to recover capital
and operating costs in the future is also a concern if the developing
turnaround in the Michigan economy does not continue.

Constructive Regulatory Environment: In DECo's last settled rate case,
the Michigan Public Service Commission (MPSC) authorized a $188 million
permanent rate increase predicated upon a 10.5% return on equity (ROE)
for rates effective Oct. 29, 2011. The outcome is indicative of
continued regulatory support and represented approximately 53% of the
$357 million permanent electric revenue requirement requested by DECo.
DECo currently plans to file its next GRC in late 2014 or early 2015 and
to self-implement rates after 6 months.

Revenue Decoupling Mechanism (RDM) Eliminated: On April 1, 2014, the
MPSC approved DECo's application to suspend the remaining amortization
to income of its $127 million gain from the elimination of its RDM as of
June 30, 2014 and to complete the remainder of the amortization over the
six month period from January to June of 2015. In the event base rates
are increased prior to July 1, 2015, DECo will cease amortization of the
gain and refund to customers the unamortized balance. Originally, in
September 2012, the MPSC approved DECo's request to defer and amortize
the gain to income in 2014 at a rate of approximately $10.6 million per
month.

Large Capital Expenditure Program: DTE plans to spend $2.3 billion on
capex in 2014 and approximately $2 billion each year in 2015 and 2016, a
level that is significantly higher than prior years. Capital spending
will be primarily focused at the regulated utilities, and includes
environmental and renewable generation investments at DECo; distribution
system enhancements, and storage and transportation projects at DTEGas;
and pipeline and gathering development in the Marcellus Shale basin at
DTE. A significant portion of capital spending will be on emissions
compliance and renewable investments to meet renewable portfolio
standards in the state.

Sufficient Liquidity: DTE has approximately $1.6 billion of total
liquidity available under its respective credit agreements as of March
31 2014, including $98 million of cash and cash equivalents. DTE's
consolidated $1.8 billion five-year unsecured revolving credit
facilities mature in 2018 and are comprised of $1.2 billion at DTE, $300
million at DECo, and $300 million at DTEGas. The facilities have a
maximum debt-to-capitalization covenant of 65% and, as of March 31,
2014, DTE was in compliance with a consolidated debt to capitalization
ratio of 48.6% under its credit agreement.

Manageable Maturities: Debt maturities over the next five years are
manageable and are as follows (excluding securitization maturities):
$260 million in 2014, $350 million in 2015, $451 million in 2016, no
maturities in 2017, and $400 million in 2018. Maturing debt will be
funded through a combination of internal cashflows and external debt
refinancings.

RATING SENSITIVITIES

Positive Rating Action: No positive rating actions are expected at this
time.

Negative Rating Action: Sustained debt-to-EBITDAR metrics above 4.0x
could cause negative rating actions. Fitch expects consolidated credit
metrics to be pressured through 2016 as a result of high capex at the
utilities. Persistently weak consolidated leverage metrics beyond
Fitch's current forecast period could lead to negative rating action for
DTE.

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